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Texas Redistricting, Kohn, Google, Wal-Mart in Court News

Nov. 28 (Bloomberg) -- Texas Governor Rick Perry asked the U.S. Supreme Court to block the use of state legislative election districts drawn by judges, after a San Antonio court refused his request.

“At issue is whether the interim maps imposed by a three-judge redistricting panel violate the U.S. Constitution and federal law, and exceeds the proper role of the judiciary,” Texas Attorney General Greg Abbott said in a Nov. 26 statement on Perry’s behalf.

Abbott said he would push for a quick ruling “so candidates will not needlessly file for office” based on “legally flawed” maps released last week by the federal court in San Antonio overseeing the state’s redistricting fight. Candidates may begin registering for Texas’s March 6 party primary elections today.

The San Antonio court has been addressing state legislative races and Texas’s elections for the U.S. Congress in separate orders. On Nov. 25, the San Antonio judges refused Perry’s request to delay the use of the interim maps the court created for both houses of the Texas legislature. Perry said yesterday he is appealing that denial to the Supreme Court.

Yesterday, Perry also asked the San Antonio court to delay primary elections for the U.S. House of Representatives after the panel adopted interim districts it created for those races on Nov. 26. The judges rejected Perry’s request within hours.

U.S. District Judges Orlando Garcia and Xavier Rodriguez, both of San Antonio, have consistently agreed on rulings in the redistricting case. U.S. Circuit Judge Jerry E. Smith of Houston has dissented from each of the court’s orders.

Garcia was appointed by President Bill Clinton, a Democrat. Rodriguez was appointed by President George W. Bush and Smith by President Ronald Reagan, both Republicans.

Hispanic activists and the U.S. Justice Department claim voter boundaries created by the Republican-controlled Legislature were intentionally designed to prevent the election of Latinos.

Texas gained four new congressional seats after adding almost 4.3 million new residents since 2000. Hispanics comprised about 65 percent of that increase, according to the 2010 U.S. Census.

The Texas case is Perez v. Perry, 5:11-cv-00360, U.S. District Court, Western District of Texas (San Antonio). The Washington case is Texas v. U.S., 1:11-cv-1303, U.S. District Court, District of Columbia (Washington).

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Madoff Associate Sonja Kohn Has Assets Frozen by U.K. Court

A U.K. court froze the assets of Bernard L. Madoff associate Sonja Kohn, the former chairwoman of Bank Medici AG, who a judge said made at least $56 million introducing clients to the confidence man.

Liquidators of Madoff’s estate are pursuing Kohn and the directors of Madoff Securities International Ltd., the company’s English unit, for the return of assets.

Kohn, 63, met Madoff in the 1980s and introduced him to investors who put billions of dollars into his Ponzi fraud. She is accused of billing Madoff companies for research, analysis and consulting services while in reality the payments were “secret kickbacks” for introducing money into the scheme, Judge Julian Flaux said in a ruling Nov. 25.

“It seems to me what emerges is a sufficiently arguable case of deliberate wrongdoing, the issuing of sham invoices and the disguising of the true nature of the payments of millions of dollars made to the Kohn defendants,” he said.

Irving Picard, the liquidator of Madoff’s U.S. operations, sued Kohn and the former directors of the U.K. unit for a total of $80 million in December 2010.

Madoff pleaded guilty in 2009 to using money from new investors to pay off old ones in a Ponzi scheme, sparking investigations and dozens of lawsuits. He is serving 150 years in prison in North Carolina for the fraud that destroyed his New York-based firm. It collapsed in December 2008.

“Mrs. Kohn was a victim of the fraud as an investor, business person and human being,” Clemens Trauttenberg, a lawyer for Kohn in Vienna, said in an e-mail.

Flaux also ruled Picard didn’t have jurisdiction to sue Kohn and her companies in the U.K. She can still be sued in the U.S. or Austria, where she was born.

The case is Madoff Securities International Ltd. v. Raven, 10-1468, High Court of Justice, Queen’s Bench Division (London).

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AT&T Threatens to Sue FCC If Agency Ignores T-Mobile Pullout

AT&T Inc. said it plans to sue the Federal Communications Commission if the agency doesn’t let the company withdraw its application to buy a smaller rival for $39 billion.

The FCC is obligated by its own rules to honor AT&T’s move to rescind its application to acquire T-Mobile USA Inc., Wayne Watts, general counsel for AT&T, said Nov. 25 in a blog entry.

“We have every right to withdraw our merger from the FCC, and the FCC has no right to stop us,” Watts said in the entry on the company’s public policy blog. “Any suggestion the agency might do otherwise would be an abuse of procedure which we would immediately challenge in court.”

AT&T and T-Mobile parent Deutsche Telekom AG withdrew their FCC applications Nov. 24 after agency Chairman Julius Genachowski asked fellow commissioners on Nov. 22 to send the deal to a hearing, signaling an attempt to scuttle the merger.

The Justice Department has sued to block the transaction as anticompetitive, with a trial to start in February.

AT&T’s move is “a request” that the FCC will consider, an agency spokeswoman, Tammy Sun, said Nov. 24 in an e-mailed statement. Sun declined to comment further.

The FCC should publish the order that would send the merger to a hearing, Harold Feld, legal director of Washington-based advocacy group Public Knowledge, which opposes the deal, said Nov. 24 in an e-mailed statement.

“It is sure to contain conclusions that AT&T would like to keep quiet,” Feld said.

With AT&T’s withdrawal, the FCC could dismiss the application with prejudice, Feld said. The effect would be to tell AT&T, “You’re done.” Don’t come back to us with anything like this again,’’ he said.

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Ex-Snoras Owners Antonov, Baranauskas Get Bail in U.K. Court

Former Bankas Snoras AB owners Vladimir Antonov and Raimondas Baranauskas told a U.K. judge they were innocent of Lithuanian allegations of fraud and embezzlement that pushed the bank into insolvency.

Antonov, 36, and Baranauskas, 53, were granted bail Nov. 25 by Judge Caroline Tubbs at a hearing in London. They were arrested Nov. 24 after Lithuanian authorities issued a European warrant.

Antonov “strenuously denies dishonesty in any of his dealings,” Rachel Scott, his lawyer, told the court. “He doesn’t impose a serious flight risk.”

The Lithuanian government took over Snoras, the country’s third-biggest bank by deposits, on Nov. 16 after the central bank discovered that assets reported on the lender’s balance sheet were missing. The central bank said Snoras was insolvent and would seek court protection.

Antonov, owner of the Portsmouth football club in southern England, will be released on bail of 75,000 pounds ($116,000) and must report three times a week to a police station near his home in the Notting Hill area of London.

The men are accused of stealing about 879 million litas ($388 million) through forgery and misappropriation, U.K. prosecutor Natalie Soule said. They allegedly forged documents to show false deposits in unspecified Swiss banks, Soule said.

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New Suits

Google Sued in Hamburg by Mosley on ‘Nazi’ Sex-Party Search

Google Inc., the world’s biggest Internet search engine provider, was sued in a Hamburg court by Max Mosley, the former Formula One president, over search results referring to a “Nazi-themed” sex party.

Mosley told Nov. 24 a U.K. inquiry investigating the phone-hacking scandal at News Corp. that he filed suits against Google in Germany and France over the search results. The Hamburg court received a complaint by Mosley against Google, the tribunal’s spokesman Conrad-Friedrich Mueller-Horn said Nov. 25.

Mosley won a 60,000 pound ($92,900) breach-of-privacy award in a U.K. court from Rupert Murdoch’s News of the World in 2008 for publishing the story on a Nazi-themed “orgy,” along with a video, without contacting him. A judge ruled there was no Nazi theme and the story wasn’t in the public interest. Mosley also won a similar ruling against News Corp. in France.

Mosley, who has taken legal action in 21 countries over the issue, told the committee he seeks have false and libelous references to the “Nazi-themed orgy” and the controversial News of the World video removed from the Internet.

Google “can’t control what others post online, but when we’re told that a specific page is illegal under a court order, then we move quickly to remove it from our search results,” Katharina Vanzella, an external spokeswoman, said in an e-mail.

The German case is LG Hamburg, 324 O 264/11.

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Deutsche Bank Faces Breuer Trial Amid Ackermann Kirch Probe

Rolf Breuer, Deutsche Bank AG’s former chief executive officer, appeared in court Nov. 24 to defend charges that he lied in trial testimony, allegations similar to those leveled against his successor.

Breuer’s criminal trial began 10 days after the bank said current CEO Josef Ackermann is under investigation over testimony he gave earlier this year in a lawsuit brought by Leo Kirch. The charges against Breuer relate to a 2003 appearance in another Kirch suit.

The start of the trial was delayed when the defense asked to have presiding judge Anton Winkler removed for bias. The motion was dismissed and the trial opened more than six hours late. Prosecutor Christiane Serini, who also works on the Ackermann probe, read the indictment.

With Breuer’s trial opening in the shadow of the Ackermann probe, it will be more difficult for Deutsche Bank to defend its public image and may also hamper Breuer’s defense, said Frank Saliger, a criminal law professor at Bucerius Law School in Hamburg.

“From a legal perspective, Breuer’s trial and the Ackermann probe are two different matters which need to be, and should be, handled strictly separately,” Saliger said. “But as a matter of fact, of course, all persons involved take notice of what happens. It’s difficult for an investigator to escape the feeling that one case is somehow backed by the fact that more similar probes evolved out of the same overall issue.”

Kirch’s allegations are baseless, said Christian Streckert, a spokesman for the Frankfurt-based lender. Ackermann’s lawyer Eberhard Kempf didn’t reply to e-mails seeking comment.

“We are seeking an acquittal,” Breuer’s attorney Sven Thomas told reporters after the hearing.“And we will get it.”

Kirch, who died in July, was once one of Germany’s biggest media tycoons. He pursued civil lawsuits against Breuer and Deutsche Bank seeking at least 3.3 billion euros ($4.4 billion). The lawsuits, which are continuing after Kirch’s death, claim his company failed after Breuer questioned its creditworthiness in a 2002 Bloomberg TV interview.

The Breuer trial is scheduled to continue on Dec. 2.

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Australia Judge Questions Fairness of Samsung Tablet Ban

An Australian appeals court judge questioned the fairness of a ruling that granted Apple Inc.’s request to ban the sale of the iPad2’s biggest rival in a legal dispute with Samsung Electronics Co. over patent infringement.

“The result looks terribly fair to Apple and not terribly fair to Samsung,” Federal Court Justice Lindsay Foster said Nov.25 at a hearing in Sydney on Samsung’s appeal for the ban to be overturned.

Federal Court Justice Annabelle Bennett issued an injunction Oct. 13 barring the sale of the Galaxy 10.1 Tab in Australia until Apple and Samsung resolve the patent dispute at trial. Bennett failed to consider the “dire consequences” of the ban on Samsung, which has been “entirely shut out” from marketing the device, Neil Young, Samsung’s lawyer, said Nov. 25.

The suit is part of a legal dispute between the companies in at least four countries. It began in April, when Apple accused Suwon, South Korea-based Samsung of “slavishly” copying its designs. Samsung plans to scrap Australian sales of the newest Galaxy tablet if it misses the Christmas shopping season, which would render the device “dead,” Young said at an Oct. 4 hearing.

Justice John Dowsett said the panel would try to rule early next week on Samsung’s request to lift the injunction.

“I find it hard to believe Apple couldn’t keep accounts” to determine the effect of the sale of the Galaxy 10.1 and claim damages if it were successful in its patent accusations, Dowsett said.

The case is Samsung Electronics Co. v. Apple Inc. NSD1792/2011. Full Court of the Federal Court of Australia (Sydney).

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Ryanair Wins U.K. Ruling Halting Probe of Aer Lingus Stake

Ryanair Holdings Plc, Europe’s biggest discount carrier, won a U.K. ruling temporarily blocking Britain’s antitrust regulator from reviewing its minority stake in Irish competitor Aer Lingus Group Plc during an appeal.

The Office of Fair Trading was ordered Nov. 24 to suspend its investigation until the Court of Appeal decides whether the regulator waited too long to study Ryanair’s 30 percent holding in Aer Lingus -- a probe that began four years after the share purchase was completed.

“The OFT’s investigation will now be suspended until the Court of Appeal rules on this ‘out of time’ issue, following a full hearing of the case, which is scheduled for mid-2012,” Dublin-based Ryanair said Nov. 25 in a statement.

The watchdog began the investigation in October 2010, saying it must examine whether Ryanair’s Aer Lingus stake gives it “material influence” over a competitor’s commercial policy in a way that could lessen competition and raise prices. Ryanair sued in January to block the investigation.

“The OFT agreed a stay would be sensible pending the outcome of that appeal in this exceptional case,” Kasia Reardon, a spokeswoman for the watchdog, said in an e-mailed statement.

Aer Lingus said in a separate statement that the court would conduct the appeal as soon as possible.

After buying the stake in 2006, Ryanair mounted a public bid for the rest of Dublin-based Aer Lingus. The European Commission in June 2007 blocked the takeover -- a decision Ryanair failed to overturn in a European Union court.

Aer Lingus appealed the EU ruling, challenging the commission’s decision not to force Dublin-based Ryanair to divest itself of its minority holding. In July 2010, the European General Court ruled the Brussels-based regulator couldn’t force a divestment when a minority stake doesn’t give “decisive influence” over a company.

For the latest verdict and settlement news, click here.

On The Docket

South African Judge Aims to Give Wal-Mart Ruling by Year-End

Judge Dennis Davis of the South African Competition Appeal Court said he aims to announce a decision on Wal-Mart Stores Inc.’s purchase of a controlling stake in Massmart Holdings Ltd. by the end of next month.

“I hope to get it out by the end of December,” Davis said Nov. 25 in an interview in Cape Town. “I can give you a guarantee that it will be out by the end of January.”

On May 31, South Africa’s Competition Tribunal authorized Wal-Mart to buy a 51 percent holding in Johannesburg-based Massmart, South Africa’s biggest food and general-goods wholesaler. Approval was subject to the companies’ promising to refrain from firing workers for two years and set up a fund to assist local suppliers and manufacturers.

The government and a retail workers’ labor union contested the tribunal’s ruling, saying the regulator’s hearings were procedurally flawed and its ruling failed to take account of the takeover’s potentially negative impact on the economy.

The court may decide to refer the decision back to the tribunal, uphold the approval of the takeover or rule it should have been rejected or subjected to different conditions, Davis said during the Oct. 20-21 court hearing.

Wal-Mart, the world’s largest retailer, paid 16.5 billion rand ($1.93 billion) in June for the stake in Massmart. On June 26, the Bentonville, Arkansas-based company said it would create 15,000 jobs in South Africa within five years and spend about 60 billion rand more on food or fast-moving consumer goods in the period, most of which would go to local suppliers.

The case is South Africa Commercial, Catering and Allied Workers Union v Wal-Mart Stores Inc., 111/CAC/Jul11.

Litigation Departments

U.S. Law Firms Plan to Follow Trade Deal With Korea Offices

Cleary, Gottlieb, Steen & Hamilton LLP, Samsung Life Insurance Co.’s adviser on South Korea’s biggest initial public offering, plans an office in Seoul now that a free trade deal is allowing foreign law firms in.

Yong Guk Lee, who will move from Hong Kong to open the new office in the first half of 2012, said it will help the New York-based firm serve Korean clients who are investing and facing more litigation overseas.

South Korean lawmakers last week ratified the free trade agreement first negotiated with the U.S. government more than four years ago. The accord, which is likely to take effect Jan. 1, allows American lawyers to enter a market where more than $119 billion has been raised from debt and equity sales this year, from $92 billion in 2005.

Cleary Gottlieb and Los Angeles-based Paul Hastings LLP, which has also declared its intention to open a Korean office, may beat their European rivals into Seoul. While the EU’s free trade accord with South Korea came into force on July 1, no foreign law firms have set up offices in South Korea, according to Lee Ki Young, of the Justice Ministry’s international legal affairs division.

European and U.K. firms are lacking in qualified lawyers to send to Asia’s fourth-largest economy because most Korean-speaking lawyers working for international firms are U.S.- trained, said Evan Jowers of Kinney Recruiting.

“You just don’t see that many Korean lawyers that are U.K.-trained,” said Jowers, the managing director of the company’s Hong Kong and New York offices.

Getting closer to South Korean clients and law firms is one of the reasons DLA Piper, the world’s largest legal firm with more than 4,000 lawyers, is studying opening an office, according to Alastair Da Costa, its Asia Pacific managing director.

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To contact the reporter on this story: Elizabeth Amon in Brooklyn, New York, at

To contact the editor responsible for this story: Michael Hytha at

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